NZD/USD soars sharply on soft US jobs date, ahead of Nonfarm Payrolls

• NZD/USD stages recovery, as Bank of Japan Governor Ueda's hawkish comments impact the Greenback.
• US equities rebound on softer-than-expected jobs data; speculations of over 100 basis points Fed rate cut impact the US Dollar.
• BoJ's Ueda suggests various policy rate options, triggering a 2.20% Yen rally against the Greenback.

The NZD/USD stages a recovery on Thursday as the Greenback (USD) remains under pressure, courtesy of hawkish comments by Bank of Japan (BoJ) Governor Kazuo Ueda. That, along with soft US economic data revealed in the day, sponsored the pair’s leg up to the current exchange rate at 0.6187 and gains 0.87%.

The US Dollar Index falls more than 0.50% an NZD/USD’s tailwind

US equities rebounded during the North American session, fueled by softer-than-expected US jobs data. Speculations the US Federal Reserve would slash rates by more than 100 basis points mount, a headwind for the Greenback. Hence, the US Dollar Index (DXY), which tracks the currency’s value against six rivals drops 0.57%, at 103.56, weighed by a strong Japanese Yen (JPY).

Comments by the BoJ Governor Ueda stated that there are various options for the policy rate, such as normalizing monetary policy and paving the way to end negative interest rates. That roiled up the markets, with the Yen rallying against the Greenback more than 2.20%.

Delving into US data, Initial Jobless Claims for the last week missed estimates of 222K, which came at 220K but exceeded two weeks’ data of 219K. The US Challenge Job Cuts revealed companies trimmed job posts by 45K, 24% more than October’s 38.826K. Today’s data and previously released data keep investors' hopes high that the US central banks will cut rates in the first half of 2024.

The economic docket was absent on the New Zealand front and would finish the week that way. However, NZ is seen as a proxy for China, one of its largest trading partners. China’s Exports grew for the first time in six months, rising by 0.5%, while Imports fell by 0.6%.

NZD/USD Price Analysis: Technical outlook

The NZD/USD downtrend halts on Thursday, though downside risks remain unless buyers reclaim the high of December 6 at 0.6177. A breach of the latter will open the door to challenge the 0.6200 figure. Once cleared, there would be a clear path to test the July 31 high at 0.6225. On the other hand, a bearish resumption is the most likely scenario, as the 200-day moving average (DMA) acts like a magnet. Firstly, the sellers must drag prices toward 0.6100, ahead of the 200-DMA at 0.6088.